Created to enable fast digital transactions without traditional intermediaries, cryptocurrencies have become an increasingly popular tool for criminal organizations to move funds globally through complex digital financial architectures, making it ever more difficult for authorities to trace illicit money.
Innovation has also reached cryptocurrency mining, the process by which specialized computer systems validate transactions on certain blockchains — the decentralized digital ledgers that record and verify all cryptocurrency transactions. In return, the operators of these systems receive newly created cryptocurrency. One example emerged in May, when Brazil’s Civil Police uncovered a Red Command (CV) cryptocurrency mining operation in the Complexo do Lins neighborhood of Rio de Janeiro. The facility consisted of 30 high-performance computers powered through an illegal connection to the electrical grid and operated entirely remotely.
“The advantage is that cryptocurrencies obtained through mining have a technical origin that can be associated with a legitimate activity. This creates additional challenges when trying to trace financial assets,” Álvaro Marques, a former Brazilian Federal Police agent and investigative intelligence consultant for the Rio de Janeiro State Public Prosecutor’s Office, told Diálogo.
According to experts, this trend reflects a broader shift: Criminal organizations are no longer using cryptocurrencies solely to launder illicit proceeds. They are also investing in technologies capable of generating income that appears legitimate while strengthening their financial independence. At the same time, specialized networks are emerging that offer money laundering as a service by providing shared digital infrastructures based on cryptocurrencies and exchange platforms. As a result, money laundering has become a highly specialized criminal market capable of serving multiple criminal organizations simultaneously while enhancing their operational capabilities.
Financial ecosystems
Cryptocurrencies have not replaced traditional money laundering networks — they have made them far more efficient. Today, illicit proceeds move through sophisticated financial ecosystems that include digital financial institutions (fintechs), over-the-counter (OTC) cryptocurrency brokers, and cryptocurrency exchanges, rapidly crossing borders before reentering the legitimate economy. Each stage adds another layer of complexity, making it increasingly difficult for investigators to trace the movement of funds and identify their true beneficiaries.
“Criminal organizations exploit jurisdictions with different levels of regulatory oversight, moving funds through platforms located in countries where supervisory mechanisms remain underdeveloped,” Marques said.
The ability to move capital without relying on cash and with a lower risk of interception has become one of the principal operational advantages for criminal organizations. “Criminal organizations are generally seeking greater efficiency, and the fact that cryptocurrencies allow funds to cross borders within seconds is extremely attractive,” Caio Motta, senior Solutions Architect for Latin America at Chainalysis, a blockchain intelligence and analytics company, told Diálogo.
Investigations show that this model is already widespread across the region. In Brazil, Operation Hidden Flow (Operação Fluxo Oculto) revealed in May that six fintech companies under investigation processed approximately $5.1 billion in transactions between 2022 and 2025, operating as “parallel banks” used by the First Capital Command (PCC) and other criminal organizations. In Colombia, Operation Gulupa dismantled a network linked to the Clan del Golfo that allegedly laundered approximately $46 million through cryptocurrency exchanges and shell companies. In Chile, the financial arm of the Tren de Aragua has been accused of laundering more than $13.5 million using Bitcoin, straw men, and international wire transfers.
The role of foreign actors
The internationalization of cryptocurrencies is reshaping the geography of organized crime in Latin America. Criminal organizations no longer rely exclusively on local money laundering networks. Instead, they can draw on foreign financial facilitators and global infrastructures that provide money laundering as a highly specialized service, enabling illicit funds to be transferred and reinvested across multiple continents.
“In Brazil, we identified that money laundering operations linked to drug cartels, Chinese money laundering networks, and illicit financial flows associated with Russia together accounted for more than 50 percent of the illicit inflows detected on some Brazilian cryptocurrency exchange platforms in 2025,” Motta said.
Among the most significant actors are Chinese money laundering networks. “These are highly structured organizations that provide money laundering services primarily to drug trafficking organizations, fraud networks, and, increasingly, state actors,” Motta explained.
One example emerged in April, when Brazil’s Federal Police identified fintech Golden Cat Processamento de Pagamento Ltda., operated by Chinese nationals, as one of the principal financial hubs of an alleged money laundering scheme. According to investigators, the broader network processed more than $50.8 billion, consisting primarily of funds derived from illegal online gambling that were later redistributed through shell companies and straw men before being transferred overseas.
This evolution also extends to terrorism. In July, Operation Hawala dismantled in Brazil a network accused of laundering more than $19.5 million for the CV, the PCC, and the Terceiro Comando Puro (TCP). Investigators also identified a transaction between the network’s alleged leader, Lebanese national Reda Zayoun, and Egyptian national Haytham Ahmad Shukri Ahmad Al-Maghrabi, who has been designated by the United States for providing support to al-Qaeda. Earlier, in 2025, another Egyptian national, Mohamed Ahmed Elsayed Ahmed Ibrahim, whom the FBI had previously identified as having acted as “a financial operations facilitator on behalf of al-Qaeda,” appeared in an investigation into a cryptocurrency laundering scheme linked to the CV.
Hezbollah has also emerged in this landscape. The Akil Rada clan, sanctioned by the United States for providing financial support to the Shiite group, maintains business interests that include the cryptocurrency sector as well as a network of companies with operations in Venezuela, Colombia, Panama, Hong Kong, and China.
For analysts, this convergence represents a significant escalation of the threat. By sharing the same global financial infrastructures, these networks become more resilient, more difficult to dismantle, and increasingly dependent on close international cooperation. According to Marques, “the effectiveness of criminal prosecution increasingly depends on the rapid exchange of information and efficient international coordination.”
For Motta, however, the real objective should be to target the financial infrastructure that sustains organized crime. “That means strengthening licensing and oversight processes, monitoring transactions in real time, increasing scrutiny of OTC brokers and shell companies, enhancing international cooperation, and accelerating the freezing and seizure of digital assets,” he concluded.
